Grand Rapids 'Big Buck' closes

September 24, 2003|By Peter Comings, News Editor

GAYLORD - Assuring that its Gaylord flagship location is running in the black, Big Buck Brewery & Steakhouse officials announced Monday they had closed the Grand Rapids restaurant because of financial losses that unit had suffered since its opening in 1997.

Company president Anthony Dombrowski said Tuesday the remaining units in Gaylord, Auburn Hills and Grapevine, Texas all retain "a positive cash flow" at the unit level "prior to corporate overhead and interest expense."

In March 1997, Big Buck opened its second unit when The Grand Rapids restaurant opened in March 1997, followed in October 1997 by a third unit in Auburn Hills. In August 2000, the Grapevine, Texas, unit opened as a joint venture with Bass Pro.

Dombrowski said the decision on the Grand Rapids site was made Sept. 10 by the company's board of directors. All questions asked of employees at the Grand Rapids restaurant were directed to Dombrowski.

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"The Gaylord store has been operating at a positive cash flow basis for quite awhile and continues to," Dombrowski assured. "I think if you talk to a few other people in the hospitality business in Gaylord they'd say the economy in the last few years has been difficult for them."

Big Buck will reassign some of its Grand Rapids employees to one of the other three locations while helping others find jobs with restaurants in Grand Rapids. The company employed a total of 376 people as of December, 2002. Twenty-five employees, reportedly, will lose their jobs at the Grand Rapids location.

While the company struggles to negotiate its way out of its three-year lease in Grand Rapids with the Eyde Brothers Development Corp., amounting to $140,000 each year plus property taxes, Dombrowski faces the possibility the development corporation may require Big Buck to repurchase the property for $1.4 million plus $70,000 for each year since April 1997 on a pro rata basis.

Eyde Brothers is owned by one of Big Buck's "significant shareholders" who also is the landlord of the company's Auburn Hills location. According to the company's Securities Exchange Commission filings in August, the repurchase clause went into effect because annual gross sales did not exceed $1.5 million for the lease year ended in April. The same clause also became effective on the Auburn Hills location, repurchase price $4 million, at which gross sales did not exceed $8 million in the fourth or fifth lease year.

"This is one step that we're taking to try and improve our cash flow situation," said Dombrowski.

The company continues to attempt to renegotiate $10.6 million in principal and interest payments to the Wayne County Retirement System. The company has never posted a dividend to stockholders, whose stock was delisted from the NASDAQ exchange late last year.